ROI on Social Listening: All You Need To Know!

4:48 am
October 5, 2022
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ROI on Social Listening: All You Need To Know!

The debate around return on investment (ROI) for social media engagement and investment has been a debate for many years. People who favor the social media ecosystem point toward attention, brand building, recall, and recognition, while those in opposition claim that retweets, likes, and followers do not directly translate to business.

The same set of opposition also questions the ROI of social listening. Their argument is pretty simple: how does social listening directly contribute to the company?

ROI on social listening needs to be understood in the context of its potential benefits. A solution like social listening can only be profitable for companies if it helps them earn more revenue or save on costs. Social listening offers the opportunity for a marketing team to ground creativity in data. At the same time, it is a crucial barometer to track and measure the brand's health and the competition. In simple words, social listening can help us do both.

According to Statista, 3.6 billion people worldwide use social media, which is expected to grow to 4.41 billion by 2025. Millennials use social media platforms for over two hours daily while Gen-Z logs in for 2 hours and 55 minutes on average, as per World Economic Forum. With many users spending a lot of time on these platforms, businesses need to be present to understand the context of the conversation and how it can be used for business success.

Like every other business decision, it is vital to understand the ROI of social listening before deciding to go ahead with the marketing solution. Knowing if it can make a meaningful contribution to the business is critical.

Here is all there is to know about ROI on social listening:

Better understanding and engagement with the audience

As they say, we can only manage what we can measure. Social listening helps us better understand and engage with the target audience. The function can drive revenue by guiding the teams on consumer preferences. It can be used in a variety of ways that can help a business be more profitable. 

There are endless opportunities to drive business with the right social listening strategy. With an ear to the ground, we can understand the possible trends, issues with the competition, and opportunities for the brand.

Social listening can drive product design, launch timing, marketing campaigns, and overall business strategy. The issues customers face in the industry can inform the direction taken by the marketing campaign. We can highlight these issues as hooks to grab the user's attention and improve results. Similar extensions are possible in all business functions with a proper understanding and engagement with the target audience.

For instance, if a business is selling Men's formal shirts, it can use social listening tools to understand the consumer feedback on its products along with the changing consumer preferences and the latest trends. As a result, it can impact the brand's overall product and marketing mix.

Improved campaign strategy

Social listening is an efficient way to build more effective campaigns that have the potential to drive business. For calculating ROI on social listening, knowing that it acts as an enabler for other business functions is essential. Social listening on its own can't grow revenue or decrease costs. It is a marketing solution that other business functions can use to improve business efficiency. 

For instance, social listening can help businesses build better campaigns. With the ability to drill down on relevant data quickly and separate the wheat from the chaff, social listening can help a business drive the marketing function efficiently. 

By understanding the kind of language consumers are conversing in, it is easier for a brand to finalize a communication plan with a better chance of success. Similarly, a team can track and improve active campaigns with competitor intelligence

Microsoft Research uses social listening for competitive research, hashtag trends, and conversation movers. It helps them understand the consumers' language and drive campaign strategy accordingly.

Effective influencer identification and marketing opportunities

Social listening can help create an effective strategy for identifying the right influencers and marketing opportunities for the brand. Each wrong influencer hired and spent on marketing opportunities can increase the overall marketing spend. As a result, ROI on social listening should be measured in a way that helps to calculate savings made with the marketing solution. 

A business can first identify who is talking about its brand, competition, or the industry in the target market. Which influencers are sharing this conversation? Which non-competing brands are part of the conversation? 

Answering these questions can help achieve a wider reach and engagement in the digital presence. At the same time, we can identify more effective marketing opportunities for the brand using social listening. It can also help a brand develop long-term relationships in the industry and with several non-competing brands to create a win-win situation.

For instance, social listening can help businesses identify non-competitive co-marketing partners and develop long-term relationships with target influencers for better business impact.

Competitive research and market knowledge

Compared to the cost businesses need to spend for competitive research without social listening, it can be done at a fraction of the cost using this marketing solution. Social listening enables the marketing and product team to understand the competition's what, why, and how, saving valuable resources for the business. 

At the same time, gathering insights regarding the ongoing conversations around a brand can lead to a better grasp of consumer sentiment. Then, with a greater understanding of the competition, we are in a much better position to identify opportunities for brand improvement and differentiation. 

Listening to the competition's capabilities as part of the social listening strategy is a secret weapon that can build a competitive advantage for the business.

Increased leads and sales

Social listening is an effective tool to help businesses drive revenue by expanding their existing relationships. At the same time, the actionable insights provided by the social listening tools drive lead generation and the sales process in the organization. Following this strategy will help us build a steady pipeline of new customers and identify potential customers on social media. 

The increased leads and sales will directly contribute to more business. However, it is critical to put in place a system to track the sales coming through social listening. It will help calculate the ROI on social listening.

Consider, for example, how a business can take the help of sentiment analysis to identify potential customers engaging in positive influencer groups for the brand. This analysis can be instrumental in improving leads and sales for the brand.

Better customer service

Social listening is critical to improving the overall customer experience by analyzing the areas highlighted by the customers. For example, based on customers' most frequently asked queries or the issues being highlighted on social media, a business can build self-service solutions to improve the customer experience. ROI on social listening can be measured by analyzing the customer sentiment over time and the number of calls received for the commonly asked questions. 

If a company can reduce the number of calls by creating self-service solutions, the team is better equipped to handle the more severe queries with better time utilization. With social listening, a business has the potential to provide timely and topical help that can reduce returns and improve brand reputation.

For instance, a company can use social listening tools to track the positive or negative experiences people share on social media. As the tool allows us to filter, group, and understand these reviews better, it is easier to make the required changes to improve the level of customer service. 

Crisis management

Businesses hate to be in a crisis as it puts a dent in brand reputation and sales. Social listening can be used effectively to avoid or manage a situation.

ROI on social listening can be challenging to quantify. One way could be to understand the potential damage the situation could have done to the brand's reputation and sales. With a robust social listening strategy, a company has a better chance to identify, understand and diffuse the problem before it becomes too big to handle. 

For instance, social listening tools can help highlight a simmering customer outburst for a business that can be controlled with the right strategy rather than waiting for it to escalate and become a full-blown crisis. 

Understanding customer sentiment and possible challenges the business may face is a strong advantage that can save a company millions over the long run.

Social listening can help establish a framework to measure, analyze and improve. It is more than just counting likes, followers, retweets, and shares; it is a tool that directly contributes to the company's ROI.

The social media listening efforts need a proper strategy, mindset, and timeframe from a business to work effectively. 

Cogent Incights can help build a stellar social listening strategy. Click here to know more.

 

FAQs

What is social listening?

Social listening is a marketing tool that helps brands to understand the customer sentiment around their brand, the competition, and the industry in general.

What is the value of social listening?

Social listening helps companies understand the conversations around the brands and products they offer. The critical value of social listening is understanding customer sentiment.

What is a social listening tool?

A social listening tool is software that helps monitor and analyzes online conversations that are taking place around the brand. It can also help to understand competitors' perceptions and anything else relevant for business.

Why is social listening important?

Social listening is essential because it can help a business improve in multiple ways based on consumer feedback.

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